(Yicai Global) Sept. 8 -- After being active on Alibaba Group Holding Ltd’s [NYSE:BABA] e-commerce platform Tmall for three years, US members-only warehouse Costco Wholesale Corp. [NASDAQ:COST] has decided to open its first retail warehouse in mainland China.
An analyst told Yicai Global the American firm will open a Shanghai store but doesn’t have a detailed schedule in place.
Before opening the brick-and-mortar store, Costco will run a flagship store on Tmall from around Sept. 13, the business-to-consumer retail website said.
Akin to its stateside counterparts, the Shanghai store will also be members only, Costco added.
Best known for its members-only business philosophy, the wholesaler makes most of its profits from membership fees, rather than selling products.
Getting Chinese consumers’ to accept the ‘pay first, shop later’ concept is likely the company’s biggest uncertainty right now.
Costco’s unique low profit model helps the traditional retail industry resist the rise of e-commerce. The warehouse retailer has kicked off a store-opening spree on a nationwide scale. Lei Jun, founder of leading Chinese smartphone maker Xiaomi, once said it was a “miracle” that Costco’s model could survive the global retail market.